Pappy Van Winkle Bourbon

The Mystery Behind This Bourbon's Price Spike From $175 to $1,000 Per Bottle

“In 2000, it was selling for $175 a bottle." Jonathan Goldstein, of Manhattan's well-stocked Park Avenue Liquor Shop, is discussing the significant retail price hike over the past few years for Pappy Van Winkle's Family Reserve 23-Year Bourbon. "Now it's going for $500 or $1,000 or more. It's almost a tenfold price increase in 14 years."

The WTF factor on "Pappy's" rise from old guy bourbon to celebrity stalker-worthy status has created its own mythology: a swirling miasma of online conspiracies about price gouging, near-black market auctions and unscrupulous middlemen. What's the story? Is the rumor (that we totally just made up) true that you must commit a blood sacrifice to even taste the stuff?

To bring you up to speed, Pappy Van Winkle's Family Reserve is a rare, very small-batch wheated bourbon aged a long time and produced by Julian Proctor Van Winkle III ("Pappy" was his grandfather) and the Old Rip Van Winkle Distillery (a distillery in name only). Van Winkle also produces Old Rip Van Winkle 10-year bourbon and a 13-year rye (neither are "Pappys"). The brand is now owned by the Sazerac Company (which owns or is tied in with a whole slew brands, including Blanton's, Fireball and George T Stagg), and is produced and bottled at the company's Buffalo Trace Distillery in Kentucky, to the Van Winkles' specs.

Old Rip Van Winkle crafts six expressions in total, and all of them are popular these days. Only three of them fall under the banner of "Pappy" Family Reserve: a 15-, 20- and (the holy grail) 23-year bourbon. Neither Van Winkle nor Buffalo Trace will talk details about all the source whisky in the Family Reserve (you'll find tons of speculation on the web), but one thing is certain: at least some amount of the 23-year includes whisky from the legendary Stitzel-Weller distillery that Van Winkle's dad and grandpa owned until 1972. The distillery, established after prohibition in 1935, shut down in 1992 and is currently owned by spirits giant Diageo, home to their Bulleit Bourbon brand (though Bulleit is not distilled there). In February Diageo announced that it’s establishing a visitor center on the property, and rumors have been flying this past winter about new whisky being made on site.

When Van Winkle II sold the distillery, he took several barrels of the good stuff with him (Van Winkle III bought up more when the distillery closed), and a component of the Stitzel-Weller whisky ends up in the 23-year. It's impossible to underestimate the mystlque of this distillery's production among aficionados. At WhiskyFest NY last fall, one tasting seminar featured several ultra-rare whiskies from defunct distilleries in Scotland and America, but none elicited more of a reaction than a Stitzel-Weller whiskey specially bottled for the show. Even at 137 proof, it was complex, with notes of honey, lime soda, lumber, chocolate-covered cherry and candied lemon.

Beginning about five years ago or so, demand for the older Family Reserve expressions began to grow exponentially. We'll get into the why, but the upshot was, prices for the stuff at the end market (bars, liquor stores and auctions) went through the roof. What had been a well-respected but fairly under-the-radar bourbon suddenly stole the boozy spotlight from everything else. The label's become so coveted that in October of last year, thieves made off with an estimated $26,000 (wholesale) worth of the brand's bourbon and rye, including almost 200 bottles of the 20-year Reserve. For a brand whose annual production is so small that most bars and liquor stores are lucky to get a couple of bottles each year, that's a huge chunk of inventory.

Prices have gotten so out of control that Fred Minnick, author of Whiskey Women: The Untold Story of how Women Saved Bourbon, reports on his blog that he's personally seen bottles of the 23-year sell for $5,000 and found online postings of bottles in the $6,000 range. Even the empties sell for $100 or more on eBay.